The summer driving season is upon us. What is it about slipping behind the wheel that drives Americans to the open road? For me, trips to the beach, weekend getaways, or a ride down Lake Shore Drive on a sunny day is enough to make me hunt down my car keys.

Given that the entire country takes to the streets during the warmest months, and there’s always an increase in gas prices around Memorial Day – how will driving trends be affected in the wake of unrest in the Middle East and the tragedy in Japan? Experts are already forecasting high gas prices for the summer, on top of recent increases. Here in Chicago, the cost of regular unleaded gas is already hovering dangerously near $4/gallon. Budgetary concerns could very well curtail my summer driving.

I do own my car, and being free of a car payment feels like a luxury. But I’m reminded almost daily of the other costs associated with owning a vehicle. Sometimes I wonder if car sharing is the way to go, considering the cost of insurance, city parking stickers, license plate fees, etc. All those costs are covered by the car sharing membership and usage fees. It seems like a sweet deal and a nice perk of living in a major metropolitan area. As car sharing companies promote more hybrid and electric vehicles, will their membership levels increase as summer approaches?
Of course there are caveats to everything: possibly dirty cars or being without a car in case of an emergency, but on the whole – car sharing programs do appear to be a valid option for city dwellers who like the convenience of driving but not the headaches of finding parking (I can count myself among the latter).

Readers, what are your thoughts? At what price per gallon would you be more likely to switch to a car sharing program?

Recently in this blog, I mentioned I was in the market for an auto insurance product that features a ”pay as you drive” premium rating factor. With the buzz circulating in California around “pay as your drive” auto insurance, I thought that this would be an easy task…I thought wrong. It turns out that paying for insurance based on driving usage and habits is fairly new to the marketplace and is only available in a handful of states by a handful of insurance providers.

On Thursday 12/02/10, State Farm was approved for pay as you drive auto coverage in California. Other companies are expected to launch verified mileage based insurance programs throughout the state within the next 12 months. One minor detail is that I don’t live in Cali or plan on moving to the west coast anytime in the near future. It is nice to see that insurance companies are willing to assess the risk of such programs in a state as large as California, but for the short term this doesn’t help my situation.
Upon further digging, outside of the state of California, only GMAC, Progressive, and a new insurance company called MileMeter provide discounts and/or coverage based on mileage driven and driving habits. So I called all three companies to inquire further.
Progressive offers a coverage called Snapshot, which obtains information on your driving habits through an on-board telemetric device (small device you plug into your car). Kind of weird that my insurance company would be able to see my every move, but if it can lower my insurance cost, I’d be willing to give it a try. Illinois does not have this program available, but it is currently available in Alabama, Colorado, Kentucky, Louisiana, Michigan, Minnesota, Maryland, New Jersey and Oregon. Strike One! See Lily’s blog for more information on Snapshot: http://www.comperemedia.com/blog/2011/01/take-a-drive-with-flo/

GMAC offers a program called Pay As You Go, which is an opt-in program available for OnStar subscribers that can save customers up to 54% on auto insurance. 54% off has a nice ring to it. Driving habits and scenarios are tracked via OnStar, but therein lies the problem…my Jeep is not equipped with OnStar. Strike Two!

Mile-Meter, launched in 2007, offers Pay-By-The-Mile auto insurance, but is only available in Texas. Strike Three!

Until companies can prove to be profitable through these pilot initiatives, it looks like I’ll be forced to overpay for parking and auto insurance. Or dare I say it…do I sell my car?!

For the past three months, I have begun to walk, bike, bus, and train my way to the office. So far so good, considering I spent three hours a day in the car commuting to and from my former job. The transition wasn’t easy considering I was completely dependent on my car for the past three years. But, I can now say I am officially reliant on other means of transportation.

Because of this, my Jeep has stood still for 5 weeks and counting. So I ask myself…why should I be paying for parking and auto insurance if I don’t even use my car?

The Jeep is paid off, but between a monthly parking fee of $150 and a monthly auto insurance cost of $100, I am pushing $3,000 a year on car expenses. With minimal options for parking in Chicago, parking companies have the ability to charge outrageous prices for monthly parking. So that brings me to auto insurance…Is there a way I can cut my cost without cutting my insurance coverage?

Before my research began, I contacted my current auto insurance provider to see if they could help answer some of my questions. My current auto policy has a short mileage rating factor calculated into my premium, but every policy holder that drives under 30 miles a day is given this rate reduction. What about somebody like myself who drives once a month? A person with my driving frequency and habits has a much lower risk of a claim, so why isn’t this reflected in my auto premium?

I’ve seen advertisements promoting “name your price” auto insurance, but as I said, I don’t want to be underinsured. Are there any other discounts or options in the marketplace that reward lower risk consumers by minimizing their insurance cost?

I begin my quest, and will follow up with my findings…

Do you ever wonder where insurance companies come up with their premium costs? And how they can evaluate your risk of getting into an accident compared to your neighbor’s? Can they really tell that much about you just by knowing what kind of car your drive, where you live and how old you are?

Progressive’s new Snapshot Discount program offers savings while giving consumers a feeling of greater personalization and perhaps control over their auto insurance premium. This new strategy from Progressive goes beyond simply entering your information into the system and hoping the pre-determined metrics come up with some savings for you. According to Progressive’s website, Snapshot Discount is “a personalized car insurance discount you earn by driving less, in safer ways and during safer times of day. The better you drive, the more you can save.”With promises of up to 30%savings in 30 days, I was more than a little curious to research this innovative tactic.

Snapshot is currently available to Progressive customers in more than 25 states. If you sign up for Snapshot Discount, you will receive a device that plugs into the on-board diagnostic (OBD) port of your car. This little gadget can track how often you drive, when you drive and it can even asses your driving skills. This device will actually tell Progressive if you are an aggressive driver or if you frequently slam on the breaks. Talk about a back seat driver, well front seat, I guess!

For 30 days you drive around with this device plugged in, after which time Progressive will analyze your driving habits in order to determine what discounts, if any, can be applied to your policy. With a promise of up to 30% in savings, driving around with this little device seems totally worthwhile.

If you’re worried about privacy, it might help to know that this Snapshot device does not have a GPS, so while Progressive might be able to track your mileage and habits, they can’t see where you are.

So, are you ready to let your insurance company in the car with you?

It was announced in early June that Ford plans to discontinue the Mercury brand at the end of this year.

To those in the auto industry, this is not surprising news as Ford has alluded to its desire to concentrate on its more popular brands. It also shouldn’t be surprising since the Mercury brand currently accounts for less than a 1% market share in the US.

As part of Ford’s refocus, the company announced plans to expand the Lincoln lineup over the next four years.

Ford appears to be adopting the strategy used by both Chrysler and GM by aligning quality/status more with brand than with make or model.

I think the idea is that Lincoln would represent the luxury brand of the Ford Motor Company. Currently there are around 1,700 Mercury/Lincoln dealers in the United States (which will likely turn into Lincoln dealers soon).

Do you think the Lincoln brand, with an expanded lineup, can compete with the likes of Cadillac to be the king of American-made luxury cars?

In all of my excitement to report about Nissan’s March 30, 2010 press release on the all-new Nissan Leaf, I totally overlooked an announcement from General Motors. On the eve of the 2010 New York Auto Show (the same day Nissan issued its press release), General Motors announced that the new 2011 Chevy Volt would be available on showroom floors in November 2010. How could I have not blogged about this at the same time?

For those of you who don’t know, the Chevy Volt is also an electric car that, according the company’s website, can create its own electricity. When fully charged (accomplished by plugging the car in overnight), the car can run 40 miles on pure electricity. After about 40 miles, a “range-extending gas generator” kicks in, which recharges the battery and adds up to 300 drivable miles on a single tank of gas. The ability to have a car re-generate energy will be a strong selling point in why consumers should pick the Volt over the Nissan Leaf. A jump start on sales won’t hurt either.

So I have to ask: who has been holding out to be a part of the first generation of electric car owners?

Just seven months after a global recall of roughly 8.5 million vehicles, Toyota is enjoying increased car and truck sales. At the end of March, sales were expected to be 30-35% higher than they were last year. In the first ten days alone, sales surged a whopping 40% compared to early March 2009. Various incentives previously unheard of from Toyota, coupled with their effective catering to loyal customers have helped the company bounce back quicker than expected.

Some notable incentives include:

• Zero-percent financing for the first five years on its top-selling models
• The introduction of the “Toyota Auto Care Premium Package” that includes oil changes and other maintenance services for free over two years for the purchase or lease of any new vehicle
• Cash rebates ranging from $500 to $3,000 depending on the vehicle

Toyota made all the right moves to regain customer confidence and attract first-time buyers. The company admitted fault and was openly communicative with the press. They then made restitution with the aforementioned incentives to quickly resolve a crisis that might have left other competitors in dire straits. A crisis that could’ve ruined the Toyota brand and image seems to have only made the company stronger.

Progressive has all but stopped acquisition mailing. In 2009, they sent 90% fewer offers than in 2008. So far this year, Mintel Comperemedia has only tracked one auto insurance piece from Progressive. It was a card mailed by Florida Insurance Specialists to clients with a homeowner’s policy and offered a discount for Progressive auto insurance.

Progressive’s strategy to stop using direct mail is the opposite of GEICO, State Farm and Allstate, all of which have increased efforts. These auto insurance leaders have either maintained high mail volumes or increased mailings since last year.

GEICO, the largest auto insurance mailer, sends a letter as its top offer. Interestingly, it is not branded with any of the characters GEICO has developed. It does, however, have a call-to-action header: “Do not discard this letter without first visiting geico.com.”

Allstate and State Farm are next after GEICO. Each sends letters that feature a quote card, a box showing savings over the competition, and an agent’s phone number.

Maybe the reason Progressive has stopped mailing is because it is enamored with the overwhelming success of Flo and the Insurance Superstore campaign. But State Farm, Allstate and GEICO seem to be increasing direct mail alongside successful campaigns in other media.

How long will Progressive maintain reduced direct mail as part of its marketing strategy? Please contact me if you’re interested in exploring this idea further (DHayes@Mintel.com).

Wouldn’t it be nice to never have to stop at a gas station again in your life? Think about how it would feel, after a long day of work, to drive straight home as opposed to stopping at the gas station because your gas light came on. Imagine pulling into your garage, plugging your car into an outlet and walking into the house. Nice, right?

We continue to hear buzz about the new 2011 Nissan Leaf. The car, which runs entirely on electricity and does not produce any emissions, will be available in December 2010. Pricing for the car was announced on March 30, 2010, with reservations for the world’s first mass-produced electric car to begin on April 20, 2010.

On top of bragging rights of being one of the first Americans to own an all-electric car, new Nissan Leaf owners have the opportunity to receive a $7,500 federal tax credit, along with a variety of state and local incentives.

The Nissan Leaf comes with three years of roadside assistance, and those in California will have the opportunity to ride in the coveted carpool lane. And none of this addresses the amenities of the car, which features “an advanced navigation system and Internet/smart phone connectivity to the vehicle, including pre-heat/pre-cool and charging control,” according the company’s most recent press release.

Whose waiting for the April 20, 2010 start date?

Can Honda slip by?

With all of the issues clouding Toyota’s reputation in recent months, do you think that Honda will be able to sneak past the scrutiny Americans have on the automotive industry (Toyota specifically) despite announcing a recent brake recall?

The company recalled 410,000 Odyssey and Element models from 2007 and 2008 back on March 16, 2010. Honda seems to have taken on the approach of full disclosure and over-preparedness, with a company’s statement saying “although not all vehicles being recalled are affected by this issue, we are recalling all possible units to assure all customers that their vehicles will perform correctly.”

A detailed explanation of the causes associated with potential brake failure has been outlined by the company, but the company has also mentioned that it is still in the process of preparing a complete list of all vehicles affected.

It seems like Honda is trying to be transparent and forthcoming with a potential larger issue, but how will the public handle this news if the recall is extended? Will this change how Americans view Japanese cars? Could it mean a bump in sales for domestic automakers?